SSE Lean Case Study

BACKGROUND

SSE is the second largest supplier of electricity and natural gas in the United Kingdom, and the UK's largest generator of renewable energy. It incorporates the brands Airtricity, SWALEC, Southern Electric, Scottish Hydro Electric and Atlantic Electric and Gas. It also owns Southern Electric Power Distribution, Scottish Hydro Electric Power Distribution and Scottish Hydro Electric Transmission. Its subsidiaries are organised into the main businesses of generation, transmission, distribution and supply of electricity, storage and supply of gas, electrical and utility contracting and domestic appliance retailing and telecoms. SSE has 9 million customers in the UK and 20000 Employees. SSE Prides itself on its investment in its people, and invests heavily in their Training and Development.

The Challenge we were asked to support SSE with was around improving their external supplier engagement . At the time they spent around £3.5m with external training suppliers , but without any real structure or consistency in the way they weremanaged and engaged with. As such the variance in terms of cost and quality was high. We decided that a Lean Approach would allow us to instil discipline and structure into the process of managing external suppliers. We discussed with SSE that whilst the primary focus would be on creating structure and reducing variance in terms of cost and quality across the external suppliers, we also expected to drive out financial savings and increased value for the business.

When considering our challenge we opted to use the DMAIC Project methodology to formalise the problem solving process. After a number of facilitated workshops with the SSE L&D team we worked our way systematically through the current As Is process and mapped out the opportunities for improvement. It was identified that 42% of the external spend c£1.5m was with suppliers who scored below 7 out of 10. An improved Supplier Engagement Process was drawn up which would measure performance and ROI consistently across all c300 suppliers. Not only did this lead to an increased performance score from a large number of suppliers it also led to another project being initiated, which was to measure the cost variance across all suppliers.

CONCLUSION

The project was considered a real success by the SSE senior team due to the specific improvements delivered through the new Supplier Engagement Process. As part of this process all external suppliers are effectively managed using a new set of KPI’s and ROI metrics. This has led to a far more consistent product/service being received and increased value for money.

In addition to the improvement in quality scores the SSE L&D team were upskilled. and internally kicked off another project applying the same Lean/Six Sigma methodology

TESTIMONIAL

”From the initial scoping meeting with Track Training I was really impressed with the way they were keen to listen to our problem in detail. The proposed program Track suggested felt like it was the right balance of training and up-skilling of our teams. The results have been very impressive in terms of consistent quality improvements across all of our suppliers. The most significant benefit for me was the shift in mindset of our staff. This was clearly as a result of the way Track upskilled our teams as part of the project and built internal capability”